While waiting for the rest of the business community to catch up, the mining industry leads the CSR movement

by Lara Ryan

At a recent discussion on corporate social responsibility (CSR) hosted by Dalhousie University, I was struck by the makeup of the crowd. Of the 100 or so folks in attendance, about half were either students or faculty and the other half hailed from the NGO world, plus there was one representative from government and two from the business community.

This got me thinking about where CSR fits on corporate and government agendas. I’ve learned from my work that CSR is still often regarded as nice to do but not exactly a business imperative. I think this is a slowly changing, but still prevalent, attitude. I do see businesses making significant investments in developing CSR strategies, but many others still don’t appear to give it a second thought.

Interestingly, in Canada those leading the way in developing CSR strategies tend to be in the extractive industries. Mining and oil and gas companies have been working for years to set standards and create best practices around community relations and environmental-impact assessments. However, the success of these strategies is often based on regulation, not voluntary compliance. Think of the impact that the 1992 Westray disaster had on the regulatory environment around workers’ rights and health and safety.

One of the leaders that we often hear about in Atlantic Canada is Etruscan Resources, a Bedford, N.S.–based publicly traded junior mining company operating mostly in West Africa (for more about Etruscan, see “ A committed team,” page 58). Etruscan’s corporate philosophy is that natural resources belong to the people of the developing countries in which the company operates, and that it should conduct itself accordingly as a guest in the host country. It has invested heavily in health and education in the communities where its mines are located.

The Canadian extractive companies have a huge impact in the world. Some 80% of the global mining licences belong to Canadian companies, but unfortunately, many of them don’t operate under Canadian regulations abroad. With pressure from business and NGOs to address this, the Government of Canada, led by the Department of Foreign Affairs, held a series of national roundtables to discuss CSR issues in the mining and oil and gas sectors and their operations in developing countries. The objective was to examine measures that could be taken to position Canadian extractive sector companies operating in developing countries to meet or exceed leading international CSR standards and best practices.

After a lengthy and incredibly consultative process, the final report was released last year. The centrepiece is the Canadian CSR Framework, which establishes CSR standards and reporting obligations for Canadian companies. It also addresses the negative environmental and social impacts that are so often associated with Canadian extractive operations.

According to such leaders as Stephen Lewis, Alexa McDonough, and others, the recommendations in this report are groundbreaking and will help make Canada a world leader when it comes to CSR, although the federal government that heralded the work of the standing committee when it was released has still not adopted the recommendations.

“Regulation won’t change what we do,” says Estruscan CEO Gerry McConnell. “Regulations can be helpful in raising the seriousness of this issue with mining companies, but how can regulations enacted in Canada be effective against rogue mining companies? It’s a values thing. Some companies are simply not sensitive to the social impacts in these countries.”

One of the other issues raised at the Dalhousie forum related to the growing awareness and the education of students on CSR issues. University students in the audience challenged their institutions to add programs to help them understand emerging ethical issues and prepare them for the global business environment in which they will one day be working. They asked, “If the government regulated CSR standards, would university courses become standard offerings?”

Increasingly, there is pressure on companies operating internationally to meet global standards of corporate accountability, responsibility, and sustainability. Some of the standards that are well established include the Global Reporting Initiative, the Dow Jones Sustainability Index, and the Sarbanes-Oxley Act, among others. The benefits to a company that adopts CSR strategies early in its operations are enormous. Estruscan points to the ability to attract and retain a workforce because of its positive reputation, particularly when it comes to empowering local workers to make decisions, something that can be rare in similar circumstances.

McConnell insists that a genuine commitment to host communities represents a long-term investment. “We are very aware of the social and environmental issues early on and work on addressing these before we ever begin mining,” he says. “There is a lot of education that needs to happen, with a largely expat workforce that goes in to get a job done and may not have a strong sense of accountability to the social issues in those countries.”

Like many issues around CSR, this raises many questions, such as can regulations dictate values? Can the NGO community be as strong a lobby as business when it comes to influencing government? Can business be taught to be genuinely sensitive to social and environmental issues? Can leaders such as Estruscan drive a change in corporate culture by example, or will we need to wait for an attitude shift led by the next generation of businesspeople raised in a socially aware, global context? Only time will reveal the answers, and hopefully we won’t have to wait too long.

Lara Ryan is a business consultant specializing in CSR. She can be reached at lara@lararyanconsulting.ca.